The film is a semi-autobiographical coming-of-age story concerning William Miller.
The film starts out with William (Michael Angarano) at a young age, where we find him living in a household with his mother Elaine (Frances McDormand) and his sister Anita (Zooey Deschanel) in San Diego, California. While William gets along well with his mother and sister separately, both of the women in his life are at odds with each other, as Elaine struggles to keep some form of control over Anita, who feels that her mother is too overbearing. One day Anita brings home a copy of Simon & Garfunkel's Bookends album and her mother confiscates it, say that the songs are about drugs & promiscuous sex. Anita leaves in a fury.
During this time, it is revealed to William that his Mom skipped him ahead 2 grades, as all his classmates around him are 13, and he's 11. During the summer, Anita decides to leave home to become a stewardess, leaving her record collection to William. William finds a note in The Who's Tommy which tells him to listen to it with a candle burning and he'll see his future.
Time passes, and a more grown William (Patrick Fugit) enters high school. In that time, he has become interested in rock music and journalism, writing for several underground newspapers, and Creem Magazine, edited by one of his idols, famed rock writer Lester Bangs. One day, William meets Bangs (Philip Seymour Hoffman), who gives him some pointers about interviewing and the world of Rock and Roll. He also claims that William has arrived in time for the "death rattle" of rock n' roll. However, Lester sees a determination in William to succeed, and offers to pay him for an interview of the band Black Sabbath, who will be playing at the San Diego Sports Arena.
William attempts to get in, but is rebuked by the doorman at the Sports Arena. Unsure what to do, he meets a group of girls who call themselves Band-Aides. William is introduced to their leader, Penny Lane (Kate Hudson), who explains their philosophy, of how they are not groupies, but are there to support the music.
Shortly thereafter, William manages to get into the Sports Arena when he meets the opening act for the night: the band Stillwater. Complimenting them on their sound and musical talent, they allow William in. During this time, William ends up interviewing them, with the bulk of the interview coming from member Jeff Bebe (Jason Lee). William ends up watching the concert from backstage, as the band opens for Black Sabbath, performing the song "Fever Dog."
After the show, Lead guitarist Russell Hammond (Billy Crudup) invites William to meet them at the Continental Hyatt House in Los Angeles, and requests to William that they'd like Penny Lane to come along. William informs Penny and as they exit the sports arena, she gives him her contact information, and tells him of her life's goal: she plans to live in Morocco for one year.
A few days later, unknown to his mother, William sneaks off to Los Angeles with Penny, where they meet up with the band at the Hyatt House (nicknamed 'The Riot House'). It is here that William sees there may be some chemistry going on between Russell and Penny.
A couple days later, William gets a call from Ben Fong-Torres (Terry Chen) of Rolling Stone. William disguises the fact that he's 16 years old, and pitches his voice lower. Fong-Torres compliments him on his work, and asks William about any bands he'd like to cover. William suggests Stillwater, and soon joins the band on the road, traveling with the Band-Aides as well on the band's bus, named 'Doris,' much to the horror of his mother, who fears that this will derail Williams' future.
Along the way, a number of incidents happen to which William is privy:
- At an outdoor stage event, Russell is electrocuted, sending the band scrambling from the venue, much to the anger of the show's promoter. The band trashes the trailer provided by the promoter, who seems unconcerned about Russell's injury. When the gates are locked, the band has their driver crash the bus through them.
-Jeff Bebe gets into a heated row with Russell, when the band's first t-shirts arrive, with Russell as the only recognizable person in the band while everyone else is out of focus. The argument is indicative of the problems that have been plaguing the band for an indeterminate time - Russell feels his talent has allowed him to grown beyond the band's limits and Jeff feels Russell is overshadowing his bandmates.
-Following the argument, Russell and William end up at a house party in Topeka, KS, where he drops acid and climbs up on a rooftop, proclaiming to be a 'golden god.' (Moments later he jumps off the roof into the swimming pool.) William calls Dick, who comes to the house & convinces Russell to return to the band. As they leave the house, Russell, still tripping, yells at William, believing him to be a cop. Shortly after they drive away in the tour bus the band and Band Aides all reconcile a bit while singing Elton John's "Tiny Dancer" together. William insists that he needs to go home & Penny tells him he is home.
-The record company sends a renowned band manager named Dennis Hope (Jimmy Fallon) to replace their current manager, Dick Roswell (Noah Taylor). The band is apprehensive, but give in to Dennis' grand plan for the band to make more money, turning them away from their philosophy of playing 'for the fans.' Dennis is also instrumental in adding more tour dates, and the band ditches their bus 'Doris' in favor of an airplane.
As the tour winds down, William is able to interview almost everyone, but still is not able to get his key interview with Russell Hammond. What should have been a simple task becomes mind-numbing, as William is swept up with the tour, causing him to field questions from Ben Fong-Torres about the story, and rousing the ire and worry of his mother, who in one of her classes, proclaims: "rock stars have kidnapped my son." One night while he talks to his mother, Russell seizes the phone from William and tries to reason with Elaine, who immediately cuts through Russell's charm and lectures him on being more responsible, however respectfully. Russell is somewhat shaken by the conversation.
At one of the stops, William is privy to a poker game, in which Dick and Russell wager Penny Lane and the Band-Aides in a game without Penny or the girls knowing. The girls must leave the tour before they arrive in New York where Russell's wife will meet the band. The band Humble Pie ends up "winning" them, and pays Dick and Russell $50 and a case of Heineken beer. William tries to put this out of his mind, but upon hearing how Penny seems to have stepped over the line of supporting the band and fallen for Russell, tells her about the bargain Russell and Dick struck. The news has a devastating effect on Penny.
The Band-Aides and Penny end up leaving the tour before the band arrives in New York. Upon arrival at their hotel, William gets a call from Fong-Torres and others at Rolling Stone, telling him that the band will grace the cover of their next issue, and that he is permitted to tell this to the band.
At a restaurant in New York, this news is met with enthusiasm by the band. However, Russell's girlfriend, Leslie (Liz Strauber) sees Penny in a nearby corner watching Russell. Dennis goes over to talk with Penny, who rushes off. William takes off after her, finding her at the Plaza Hotel, where she has downed an entire bottle of Quaaludes. William manages to keep Penny conscious until the doctors get there. After pumping her stomach, Penny and Russell then go for a walk through Central Park, where she tells William that her real name is 'Lady Goodman,' proclaiming that he now knows 'all her secrets.' After their stroll, William takes Penny to the airport, where she flies home to San Diego.
William joins the band on the plane as they fly to a new venue. Everyone questions where William went, but he is hesitant to tell them what happened. Suddenly, the plane is caught in the edge of a storm, violently shaking everyone around. Feeling like the plane may crash or break up at any moment, everyone begins to reveal secrets and other confidential information. Dennis reveals that he once hit a man with a car, and kept on driving, not taking responsibility for the accident. Dick reveals that he took more money than his regular fee, claiming 'he knew he earned it.' Jeff reveals that he slept with Dick's wife after they broke up, and also slept with Leslie. Two more in the band also reveal they slept with Dick's wife. Jeff, in a moment of rage at Russell, reveals his true anger at Russell, and tells Leslie that Russell had been sleeping with Penny. William, angered at how the band treated Penny, finally tells them what happened to her, and proclaims his love for her. Ed Vallencourt (John Fedevich), who has mostly been silent, comes out of the closet.
After Ed speaks, the plane makes it through the weather, and everyone stays silent, not speaking for the remainder of the trip. When the plane lands, Russell tells William, that he can write whatever he wants in regards to the band.
William then goes to Rolling Stone's headquarters in San Francisco, armed with his notes, but still without his key interview with Russell. William is given a night to finish the piece, and calls Lester Bangs, who tells him to be honest and truthful, suggesting that William shouldn't have allowed himself to befriend the band.
The story that William types reveals everything, including Russell's 'golden god' speech and the airplane confessions. Once the band is contacted by Rolling Stone's fact-checker (Erin Foley), the band denies 90% of the story, and William is sent back to San Diego. At the airport, he runs into his sister Anita. Anita offers to take William on an adventure to anywhere... but the only place he wants to go is home. Anita joins William and they go to their home where Anita and Elaine reconcile and William crashes in his own bed.
Sometime after, as Stillwater is going their separate ways, one Band-aide whom Penny knows named Sapphire (Fairuza Balk) meets up with Russell, chastising him for what happened to Penny as well as him ruining Williams' story. Nearby, some new groupies are mingling with the band. Sapphire comments how the new girls are not really fans, seeing as they don't love the music.
After talking to Sapphire, Russell is compelled to call Penny and apologize, requesting to meet her. Penny gives him an address, but it is not until he arrives there that he realizes she has given him William's address. Russell first meets Elaine, whom allows him to talk with her son. Russell explains that he retracted his statement to Rolling Stone, confirming that the story was true. William then takes the opportunity to get what he never could before: a one-on-one interview with Russell about what he loves about music. Russell tells William that he loves "everything" about music.
The film then ends with a montage of different clips that play over Led Zeppelin's "Tangerine": Stillwater goes back on tour, with their old bus 'Doris' as their main mode of transportation (with their 1974 tour called the 'No More Planes Tour'). Russell and Bebe have reconciled. William sits down to breakfast with Anita and his mother, who have reconciled. Penny at an airplane ticket counter, fulfilling her decision to go to Morocco.